Occasionally I’m asked How can I close down my Seychelles Foundation?
There are several ways to close down a Seychelles Foundation.
One way is to let the registration lapse. In this option if you simply fail to pay the renewal fee after a period of time (max 18 months) the Foundation will be struck from the Register.
If the Foundation continues to operate past its due registration date and you don’t renew its annual operating license you would however become personally liable for any debts or liabilities that the Foundation may incur. Additionally ownership of any asset held by the Foundation could revert to you personally which may have tax consequences.
To avoid these risks and/or if you are owed money by the Foundation and want to claim priority for repayment you would be well advised to go through a formal winding up.
To wind up a Seychelles Foundation there is a procedure you must go through, ie as follows:
1. Initiating the dissolution process
The dissolution is initiated through a resolution of councillors. Relevant consents for the dissolution should be obtained if the charter or regulations so requires. E.g. consent of Founder or supervisory persons (protectors)
Reason for the dissolution
The Seychelles Foundations Act section 92(1) specifies that a Foundation shall be dissolved where:
(a) it is established for a definite period of time and that period expires;
(b) its object is fulfilled or becomes incapable of fulfilment as determined by a resolution of councillors and, if so required under the charter or regulations, with the consent of the Foundation’s supervisory person, if any;
(c) any term of its charter or regulations so requires;
(d) it is unable to pay its debts as they fall due;
(e) this Act provides that it shall be dissolved; or
(f) the court orders that it be dissolved.
2. Appointment of Liquidator (S92(2))
The councillors, through a resolution, should appoint a liquidator to supervise the dissolution process (or the liquidator is appointed in accordance with the charter or regulations)
The duties and powers of the liquidator are as set out under S92(3) and S93. It is recommended that publications are done by the liquidator.
3. Notice to the Registrar
The registered agent shall give the Registrar written notice upon receipt of the resolution (and applicable consents).
4. Statement by liquidator
The liquidator shall give to the registered agent a written statement once he has completed the winding up and dissolution of the affairs of the foundation
5. Filing of liquidator’s statement to the Registrar
The registered agent shall file with the Registrar a certified true copy of the liquidator’s statement
6. Certificate of dissolution
The Registrar shall strike the Foundation off the Register and issue a certificate of dissolution certifying that the Foundation has been dissolved.
7. Publication by the Registrar
The Registrar shall cause to be published in the Gazette, a notice that the Foundation has been dissolved and struck off the Register.
These are the relevant documents that need to be generated:
1. Consent of Protector (if applicable)
2. Consent of Founder (if applicable)
3. Declaration of liquidator
4. Resolution of Councillors
5. Statement by liquidator – template
6. Relevant section of the Foundations Act – including the duties and powers of the liquidator
Note that the Foundation needs to be in good standing in order to start the process.